Fiscal Cliff: It IS Just That Stupid
Like all stupid things, the Fiscal Cliff began with a lovable American President with the IQ of a rabid marmoset. Now— I realize that I just basically described every American President with the rare exception— so let me narrow it down a bit.
That one.
The Bush Tax Cuts were originally set to expire in 2010, but people were like, “Shit, we’re still in a recession. We totally thought it would be over by now” and extended the tax cuts until 2012 with the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010— also known as the Obama Tax Cuts. You can tell that Congress really put their thinking caps on with this one.
Along with extending the tax cuts, the bill:
-extended unemployment benefits for government employees
-made sure that 21 million households wouldn’t face a tax increase
-granted tax deductions to small railroad companies
-tax breaks for families with children
-some other shit with Medicaid or Medicare that I’m too tired to get into now
It happened exactly like this
Then came along the motherfucking Debt Ceiling Crisis.
Basically, the debt ceiling is the credit limit for the US government. It limits how much the government can borrow, because since the days of Alexander Hamilton, ‘Merica hasn’t run on the same rules that govern basic fucking household economics— don’t fucking spend more than you make.
But We’re America, So We Can
Anyway, in 2011, the government realized that the US of fucking A was about to exceed its credit limit and become unable to pay the interests on its debts and basically the shit was going to hit the fan. When the economic shit hits the economic fan in the United States, the whole fucking world starts to collectively freak out. Now, I don’t know if you’ve been living under a rock or what, but since 2008, the world’s economy has been, to put it kindly, roadkill. When the economy goes to shit, people can’t pay for college. They can’t take a loan for their house or car. All the bunnies boohoo and cry, Supernatural gets cancelled, and the world collectively becomes a tragic place. You get the picture. :(
The shit hitting the fan
So did everybody else. In 2011, Congress passed the Budget Control Act of 2011, which raised the Debt Ceiling by 400 FRIGGEN BILLION DOLLARS and the President could request more money up to 1.5 TRILLION dollars. Jesus Fucking Christ. Then here comes the hooker.
Not that kind, sadly
In order for the US to continue being sensible, we had to start doing some cuts. There were no talks of tax increases— remember for ‘Bama, 2012 is an election year— can’t piss off a huge portion of the country by raising taxes (although raising taxes = greater revenue for the country and probably the most efficient way to reduce the deficit/ holy motherfucking of god, as a country we like to spend WAY too much. Materialism for the win! ) Also, BECAUSE CONGRESS LIKES TO DO NOTHING, the Budget Control Act had a little something I like to call the huge holy shittin’ stick that Teddy Roosevelt himself would have been proud to wield in order to get Congress to do something. If Congress didn’t introduce a bill to cut the country’s spending, the debt ceiling would be raised by 1.2 trillion dollars BUT, and this is a huge BUT, there would be mandatory widespread cuts and austerity measures. If you want to see how well that works, here’s a picture of Greece when they did that. Pre Angela Merkel.
Like Occupy Wall Street With a Lot Less Pepper Spray. Yay?
So to recap: the Fiscal Cliff came about through a combination of the expiration of the Bush/Obama Tax Cuts in 2012, the Debt Ceiling Crisis, and the clause that forced Congress to act that tagged along on the 2011 Budget Control Act.
So, anyway, while we were celebrating the onset of 2013, Congress was sweating away, proving themselves to be the best procrastinators of all in a giant game of chicken— in order to pass the American Taxpayer Relief Act of 2012 (should be 2013, but that’s just schematics— it was 2012 when the Senate passed it, 2013 when the House passed it, and when Obama signed it. The Laws of Time do not apply to government, apparently.)
Wibbly wobbly, timey wimey…stuff
The Act basically does raise taxes. I know it says relief— but hey, you know, I guess averting financial apocalypse is relief enough. Taxes go up for the rich— it breaks my heart— by increasing capital gains (profits from sales and investments) and marginal revenue (extra revenue outside of what you get for being paid to do your job) taxes. Rich people tend not to make a lot of their money from income, but instead from investments and I don’t know, witchcraft? These changes would be as permanent as anything in government is— so probably until the next administration. The act also cuts government spending, albiet at a much reduced rate than what would have happened if Congress had sat on its ass and twiddled its thumbs.
No spending will be reduced until sometime later, but both defense and non-defense government spending will be reduced. I happen not to be sad about spending less money on bombs, but a little worried about less money for public education. I don’t really know at this point, but neither does Congress. Yay?
So… that’s the Fiscal Cliff.
The American Government